GameStop’s profit drops due to declining game sales

18 Aug 2011

GameStop’s net earnings fell from US$40.3m last year to US$30.9m this year, thanks to lower hardware and software sales.

Its total sales for the second quarter of 2011 were US$1.74bn, down 3.1pc from last year’s figure of US$1.8bn.

However, while new consoles and game sales underperformed, GameStop’s pre-owned sales increased by 12pc and its digital sales increased by 69pc. This led to gross margins of 31.2pc, an increase of 250 basis points.

Diluted earnings per share were 22 cents, compared to last’s year’s figure of 26 cents.

The quarter’s top 5 best-selling games were LA Noire, NCAA Football 2012, infamous 2, Brink and Mortal Kombat.

GameStop expects the third quarter’s diluted earnings per share to range from 38 cents to 41 cents. It predicts its comparable store sales to range from 2pc to 4pc.